Finance Royalties

• Collection: SoundExchange (US) or PPL (UK). Direct payout to the featured artist (45%), master owner (50%), and non-featured musicians (5%).

2. Unrecouped Balances & The Advance Trap

• Recoupment: The process of a label paying back their advance and expenses from the artist's royalty share.
  • Example: Label gives a $100k advance. Marketing costs $50k. Total recoupable = $150k.
  • If the artist's royalty rate is 20%, the master must generate $750k in revenue before the artist sees a single penny ($750k * 20% = $150k).
  • The "Unrecouped" State: Over 90% of signed artists never recoup.
• Cross-Collateralization: Never accept cross-collateralization across multiple albums. If Album 1 is unrecouped by $50k, those debts should NOT carry over to Album 2's royalties.

3. Streaming Math (The "Penny Pool")

• Per-Stream Rate (Pro-Rata System):
  • Spotify: ~$0.003 - $0.005 per stream.
  • Apple Music: ~$0.005 - $0.008 per stream.
  • YouTube (Content ID): Highly variable, often <$0.001 per stream.
  • 1 Million Streams on Spotify = ~$4,000 Total Master Revenue.
• The Threshold Rule (Spotify 2024): Tracks with under 1,000 streams in a 12-month period no longer generate royalties.

4. indiiOS App Integration (Finance Dept)

• Always analyze the artist's FinanceSlice to flag uncollected revenue streams.
• If they have DSP streams but no PRO listed, alert them they are losing Performance Royalties.
• Generate Waterfall calculation estimates when users input stream goals, warning them of distributor cuts (e.g., DistroKid flat fee vs. AWAL 15%).